MTN moves to increase voice, data tariffs

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MTN Group is in talks with the Nigerian Communications Commission (NCC) regarding possible tariff changes due to foreign exchange (FX) fluctuations, CEO Ralph Mupita revealed in an interview with Bloomberg.

“We obviously are engaged with the authorities and regulators to get some tariff increases for both voice and data, so that we can actually absorb some of the inflation-related and FX impacts that are in our operating costs, particularly the network operating costs,” he said.

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Mupita made this known while speaking on three broad areas the company is working on to limit the impact of the currency devaluation.

Along with discussions with the regulator, Mupita mentioned that strategies for addressing FX impact could include borrowings, renegotiating with IHS Towers, a telecommunications infrastructure provider, and cutting expenses.

“There are not too many kind of derivative instruments that we can use against this FX impacts that we have seen, but there are kind of three broad areas that we are working on, in terms of limiting the impact of the currency devaluation,” he said.

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“The first is to look at borrowings and that would have taken particularly the kind of letters of credit that would have been used to procure capex, so looking at reducing the outstanding balances there.

“The other is we are in conversations with IHS, in particular around some of our top contracts. We have sat down and we are looking at aspects that we can renegotiate to lessen the impact.

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“And the third is actually to reduce expenditure. Nigeria is a big part of our expense efficiency program. We were looking to take out 7 to 8 billion rand of expenses out of construction on a sustained ongoing basis. So those are some of the initiatives that we are taking.

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